Insurer Held Accountable for Misleading Explanation of Policy to Elderly Traveller
Insurer Held Accountable for Misleading Explanation of Policy to Elderly Traveller
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
An elderly gentleman, who submitted a claim on behalf of his injured wife, has successfully resolved his dispute against his insurance company.
The Australian Financial Complaints Authority ruled in favor of the complainant, finding that he had been misled into thinking he had coverage.
The claim was initiated after the man's wife had a severe fall down a flight of stairs during their trip to Thailand. She sustained multiple injuries, including a fractured hip and head trauma, which required her to be hospitalized for more than three weeks. Additionally, to ensure a safe journey back to Melbourne, the claimant had to purchase a business class flight for his wife, allowing her to lie flat and minimize the risk of complications.
Zurich Australia denied the claim based on the policy's exclusion of overseas medical expenses for individuals over 80 years old. However, Zurich claimed to have offered an "upgrade" to the policy, providing medical coverage for individuals over 80, which the claimant did not opt for.
The complainant obtained the policy through a local branch of his bank, referred to as CB, which offered it as a benefit for specific credit card holders. At the time of purchasing the policy, both the complainant and his wife were 81 and 80 years old, respectively.
Making an effort to follow the correct procedure given his limited computer skills, Mr. E visited the local CB branch on June 30. He expected the staff to guide him through the application process for the policy.
Mr. E alleged that the CB staff failed to inform him about the need to "upgrade" the policy in order to ensure adequate coverage for medical expenses. He left the bank under the impression that he and his wife were appropriately insured, even receiving an email confirmation from the insurer stating that the policy had been activated.
AFCA considered the claimant's assertion that a bank teller, referred to as SH, had assisted him during the application process. Despite Zurich's objections, the ruling ombudsman agreed with Mr. E's account.
The ruling acknowledged that SH had neglected to disclose the requirement to "upgrade" the policy, necessary for the claimant and his wife to have coverage, despite the bank being aware of their age. It stated that although SH's actions were unintentional, CB caused the insured party to believe they had suitable coverage.
"Given CB's knowledge of the complainants' age, this omission should have been disclosed," AFCA stated.
"SH's oversight significantly contributed to Mr. E's unwitting failure to apply for the policy upgrade. Furthermore, this omission induced Mr. E to enter into an insurance contract that he believed provided adequate coverage. However, unbeknownst to him, the policy was essentially useless in terms of overseas medical expense coverage for both him and Mrs. E."
Zurich argued that CB employees were not authorized representatives and thus were unable to offer any advice on the credit card insurance being offered. However, AFCA dismissed this argument as an attempt by the insurer to absolve itself of CB's shortcomings, stating that the bank acted, at least partially, in the insurer's interest.
The decision mandates that Zurich accept the claim and provides a compensation of $4000 ($2000 for each complainant) for non-financial losses resulting from the insurer's claim denial and subsequent challenges.
"Throughout the claims process, the insurer's stance has unfortunately caused the complainants, particularly Mr. E, to feel accused of dishonesty," expressed AFCA.
"They also feel that their recollections have been questioned. Moreover, the insurer's position in this claim has been based on flimsy evidence."
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
In the rapidly evolving digital landscape, Australian insurers are raising concerns that artificial intelligence (AI)-driven cyber threats are advancing at a pace that outstrips current market pricing models. This development poses significant challenges for the insurance industry, particularly for tradespeople and small business owners who rely on comprehensive coverage to safeguard their operations. - read more
In a strategic move to bolster its service offerings, Aviso WA has announced the acquisition of Wray Insurance, a well-established insurance brokerage in Western Australia. This acquisition is set to enhance Aviso WA's capabilities and expand its client base, providing more comprehensive insurance solutions to tradespeople and small business owners in the region. - read more
Recent data indicates a substantial increase in mental health-related claims, exerting considerable pressure on Australia's income support safety net. This trend underscores the urgent need for systemic reforms to address the growing demand for mental health support and the sustainability of income protection mechanisms. - read more
The Council of Australian Life Insurers (CALI) has announced an independent review of the Life Insurance Code of Practice, a move welcomed by industry stakeholders aiming to bolster consumer trust and protections. This review signifies a proactive step towards ensuring that the Code remains relevant and effective in addressing the evolving needs of policyholders. - read more
The Australian Senate has recently passed groundbreaking legislation that prohibits life insurers from using genetic test results in their underwriting processes. This landmark decision aims to protect consumers from potential discrimination based on their genetic information and to ensure fairness in the assessment of life insurance policies. - read more
Life insurance is a cornerstone of financial planning for Aussie families, offering protection and peace of mind. But what happens when the bustling flow of life brings changes? This is where a life insurance review comes into play. A life insurance review is a thorough analysis of your existing policy to ensure it aligns with your current life circumstances and financial goals. - read more
Life insurance is an essential safety net for families, providing financial security when it's needed the most. As your family grows, the importance of having a well-structured life insurance policy becomes even more critical. In the busy lives we lead today, it’s easy to overlook this crucial aspect of financial planning. However, ensuring your coverage meets your family's evolving needs is vital. - read more
Welcome to a pivotal guide dedicated to empowering you with the essentials of income protection insurance in Australia. As we navigate through times of uncertainty, safeguarding your financial wellbeing becomes not just a priority, but a necessity. Income protection insurance stands as one of the key pillars of financial security, ensuring a steady flow of income during periods when you're unable to work due to illness or injury. - read more
When you’re young, life is all about new experiences and making plans for a promising future. While factors like travel, career, and relationships often take centre stage, one aspect often overlooked is life insurance. It might seem like something to consider later in life, but starting a policy while you're young can be a savvy financial move. - read more
The digital age has fundamentally transformed how we approach almost every aspect of our lives, including the way we shop for life insurance in Australia. Gone are the days when one had to schedule meetings with insurance agents or flip through pamphlets to understand life insurance policies. Today, obtaining life insurance quotes online has become the norm, offering a hassle-free and incredibly accessible platform for individuals to safeguard their financial future. - read more
Start Here !
Apply now for your free Insurance assessment and price comparisons!
Knowledgebase
Moral Hazard: The concept that individuals may take on more risk when they do not bear the full consequences of that risk, often relevant in insurance scenarios.
No comments yet. Be the first to share your thoughts.